Iran and Arab states complain that it is unfair to scrutinize Tehran for allegedly developing nuclear weapons when Israel has them and is not under IAEA monitoring, as it has not signed the nuclear Non-Proliferation Treaty (NPT).

The IAEA on Thursday reduced by almost a half its aid to Iran as part of UN sanctions for its suspected attempts to build atomic weapons.

Israel has a policy of neither confirming nor denying that it has a nuclear arsenal but is believed to possess some 200 bombs or warheads.

Israeli ambassador Israel Mechaeli told the IAEA board that Israel had no reason to announce any changes in its nuclear policy, diplomats told AFP.

The board was debating Israel's nuclear programme after the Arab League expressed "deep concern and great disquiet" to the IAEA following remarks by Israeli Prime Minister Ehud Olmert in December that seemed to confirm that Israel has the bomb.

In a German television interview Olmert said: "Iran openly, explicitly and publicly threatens to wipe Israel off the map. Can you say that this is the same level, when they are aspiring to have nuclear weapons, as France, America, Russia and Israel?"

The letter to IAEA chief Mohammed ElBaradei, written by Oman on behalf of the Arab League, said "Arab States consider Israel's possession of military nuclear capabilities to be a clear violation of the will of the international community."

Soltanieh said lack of UN Security Council action against Israel's nuclear programme has "encouraged Israeli officials to make public statements in which they made threats to attack the safeguarded peaceful facilities of other countries," a clear reference to a possible Israeli attack on Iran's nuclear plants.

Egyptian ambassador to the IAEA Ramzy Ezzeldin Ramzy said the purpose of initiating debate at the atomic agency was "to put the whole thing on record, that a statement was made and to remind that this is a serious issue that will not go away."

Some non-aligned states want to see IAEA technical aid to Israel cut, much as aid to Iran is being slashed, diplomats said.

Israel is not subject to IAEA safeguards inspections.

Cuban ambassador Norma Estenoz, speaking for the Non-Aligned Movement, said NAM states on the board reiterated their "support for the establishment in the Middle East of a zone free of all weapons of mass destruction."

Estenoz said the NAM "condemns Israel . . . for continuing to develop and stockpile nuclear arsenals."

She called on Israel "to accede to the NPT without delay, to place promptly all its nuclear facilities under (IAEA) full-scope safeguards . . . and to conduct its nuclear related activities in conformity with the non-proliferation regime."

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